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Rent Arrears – is there a different way

By Anna O’Halloran,  Consultancy Managing Director

What can we do differently to engage our customers* and collect the money?

Over the last two or three years I’ve worked with around 40 different organisations, all of whom had a really great appetite to do something different to collect the money. When I say something different I mean thinking about incentives and rewards. And all of this was great; I loved every minute, working with innovative and fascinating people.

More recently though, I’ve been working on something even more different!  That’s to say, different for social housing but not necessarily different for other parts of the public sector – the use of behavioural insights (and ‘nudge’) to engage better with customers. More about the detail of this another time as it would be unfair to share the results before they’ve been shared with the organisations I’m working with. One part of the detail that I can share is the value in knowing what works and what doesn’t work. And herein lays the challenge.

When I was a Head of Service in 1999ish, I thought I’d set up a rent payment incentive scheme – I’d seen Tom Manion, CE of Irwell Valley HA in action and thought ‘I want some of what he’s doing’. So, without very much further ado (although I do remember an interesting day with the Tenants’ Fed, and another long evening with the Housing Committee), I set up a scheme. Within a year, the rent arrears had halved. And this was a local authority. How brilliant.

It was indeed brilliant and everyone was very happy, the trouble was that I’d just gone ahead and done it. In my enthusiasm, I hadn’t worked out the costs or effectiveness of what we already did, I hadn’t designed the scheme in a collaborative fashion, I hadn’t tested it, I didn’t cost it. And I didn’t really measure what had happened. I just knew that at the end of the year the arrears had reduced from 4.79% of debt to 2.21% (I still remember the exact figures).

The scheme had many parts – prize draw, reversible deposit, withdrawal of planned works and so on, and we introduced texting at the same time. I’d no idea which bit of all that was working to reduce the arrears. Great opportunity missed to have maybe spent less money, and achieved the same or even better.

What I know now would have made it even more successful and I would have gone about it in a different way. As well as proper impact and cost measurement, one of the crucial things I would have done would have been to work with customers.  Finding out attitudes and beliefs of customers in rent arrears through focus groups, co-creation techniques, appreciative inquiry or depth interviews, I don’t mean a quick meeting with involved customers. I’ve been doing a lot of depth interviews and focus groups lately and the insight obtained is incredible and invaluable when designing new rent arrears recovery frameworks.

The qualitative insight that I’ve been collecting and analysing has completely changed the way I think about rent arrears work, and when overlaid with a behavioural insight approach to changing behaviour leaves no alternative but to do things differently. I’ve been lucky enough to work with a leading international behaviour change expert on this, and we think it’s the first time it’s been done this way in our industry. That remains to been seen, but if it’s changed my attitudes and beliefs I’m certain that this different way will change how we engage with customers, and help them keep their tenancies.


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